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Harnessing Company Climate Action Beyond Paris

Widerberg, Oscar, Philipp Pattberg. 2015. Harnessing Company Climate Action Beyond Paris. Fores study 2015:6, .

Abstract

The inability of governments to steer the global community towards a safe de-carbonization pathway has left an ‘ambition gap’ between projected emissions levels and the goal of limiting global warming to 2° Celsius. In the run-up to COP21 in Paris, the private sector and its potential to help bridge this gap have drawn considerable attention. For instance, the Lima-Paris Action Agenda (LPAA) and the Non-State Actor Zone for Climate Action (NAZCA) have boosted attention, legitimacy, and research into non-state climate action by recording thousands of commitments made by cooperative initiatives comprised of hundreds of companies and investors.

This report explores companies’ climate actions by surveying past studies and new data on 2,111 companies spread across 101 cooperative initiatives in the NAZCA database1 and the CONNECT project2. Starting from the premise that non-state action should be additional to government action in order to close the ambition gap,we focus on the discrepancies between potential and actual cooperative initiative participant performance.

This study illustrates how companies collaborate with one another – in addition to working with the government and civil society – which results in an intricate web of global climate governance. Within this emerging web, a few key players figure prominently. Leading companies like Unilever, Philips, and H&M have the potential to inspire others to cut emissions further by connecting different companies and investors in cooperative initiatives. Adding up estimates from several studies about such cooperative initiatives, we find potential GHG mitigation to range from 2.7 to 3.1 GtCO2e by 2020. Should this potential be realized, it would provide a substantial contribution towards bridging the ambition gap.

Nonetheless, it is important to note that the distribution of companies researched here is heavily skewed towards the Global North and from sectors with relatively small emissions. Key companies have a patchy track-record in achieving net GHG reductions, and information on the actual performance of companies in cooperative initiatives is scarce. In fact, available ex-post data on emissions reductions paints a somber picture in which actual mitigation levels remain far below estimated potential mitigation levels. Moreover, the impact of overlaps in participation between cooperative initiatives and the national accounts remains largely unknown. Available estimations diverge considerably.

To harness the massive potential of companies taking climate action, both in terms of direct GHG emissions reductions and through indirect actions like information exchange and influencing future country pledges, our study recommends five actions.

To summarize, we are cautiously optimistic about the increased integration of companies into the global climate change regime. Increased engagement by companies may, in the long run, help countries to over achieve or surpass their pledges, thus stimulating more ambitious pledges. Companies are key in reducing emissions. Still, one should exercise caution when expecting companies’ voluntary initiatives to close the ambition gap. 

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